The revenue from visitors staying in Cook County lodging establishments has not been keeping pace with the cost of inflation for about a decade now. In fact, lodging tax revenue has “fallen off a cliff ” since 1999, Lutsen Resort owner Scott Harrison told Cook County commissioners on Tuesday, June 15, 2010. He expects local lodging establishments to face costs greater than revenues by 2012.
On behalf of county tourism bureaus, Harrison obtained funding from Iron Range Resource (IRR) to study what was causing this drop statewide. The study, which came out in February, found that the statewide compounded growth rate, which factors in true growth apart from additions in the number of beds available in a community, was 3.2% from 2000 to 2008. Urban communities had a slightly higher growth rate than rural communities. Grand Marais’ growth rate was 5.2%, the Gunflint Trail’s was 1.6%, and the Lutsen, Tofte, and Schroeder area’s was 1.9%.
Lutsen Mountains co-owner Charles Skinner reported that 60% of Cook County’s economy is directly related to tourism, with 33% coming from overnight guests and 25% from the sale of food and beverages. If the money spent in the community by employees of the tourism industry is counted, the percentage of income directly related to tourism rises to 80%.
Winter skiing has been flat for a decade, Cook County Visitors Bureau executive director Sally Nankivell reported. Superior National at Lutsen golf course revenue was down last year, Harrison added. Over the last 18 years, Skinner said, half of the Lutsen- Tofte Tourism Association’s lodging tax income has gone to the golf course.
Other areas such as Duluth are outspending Grand Marais relative to their sizes, Nankivell said. In order to compete, Cook County needs to spend more money on marketing, she said. Harrison said Duluth is “grabbing our guests on their way up here.”
Duluth has a higher lodging tax rate than Cook County, Skinner said.
Those at the meeting discussed what could be causing the decline in visitors. People aren’t doing as much wilderness vacationing as they once did, Commissioner Jan Hall said. Commissioner Fritz Sobanja agreed, saying that the number of hunting and fishing licenses purchased in Cook County has decreased over time.
Have Americans been spending less on tourism across the country? Sobanja wondered. “Tourism has been growing internationally and nationally,” Skinner said. It has been doing poorly in the rural areas of Minnesota, though, he said. He pointed out that some other states, such as South Dakota, spend more money on tourism on behalf of rural areas than Minnesota does.
Visitors staying at lodging establishments in Cook County’s four lodging tax districts pay a total tax bill of 11 7/8%.
Commissioner Sobanja asked why the Cook County Events and Visitors Bureau is no longer holding the jazz festival. It was not profitable, Nankivell answered, but over Memorial Day weekend numerous special events proved to be successful. The tourist associations had a say in what to do with the marketing dollars that would otherwise have been spent advertising the jazz festival, she said.
The Cook County Visitors Bureau officially began operation May 1. Money collected by the Lutsen-Tofte Tourism Association, the Grand Marais Area Tourism Association, the Gunflint Trail Tourism Association, the Cook County Events and Visitors Bureau, and voluntary partners including Lutsen Mountains and Grand Portage fund the new bureau, which will use the pooled funds to market the entire county.
In other news:
. The board approved a motion to grant 10-year permits for three Gunflint Trail lodges to keep boats at the Leo Lake landing for a fee of $50 per boat for the entire permit period. Nor’wester Lodge and Windigo will each be able to dock one boat at the landing and Hungry Jack Lodge will be able to dock two.
For decades, the lodges have been leaving boats there for guests to use, but the question of whether they had a right to take up the dock space was raised by a neighboring property owner who complained about noise from guests coming and going.
“It’s a dang good service,” said Commissioner Fritz Sobanja. “Considering
the age of a lot of people who vacation up here, it’s a good idea. …It’s something
that has been going on for years.” .The board voted to allow the Minnesota Department of Natural Resources (DNR) to move a metal rolling dock from Horseshoe Bay to Chicago Bay in Hovland at the request of numerous community members. Commissioner Jan Hall said right now, people need waders to put small boats into the water in Chicago Bay.
The DNR will put the docks in and take them out again each year.
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